Premium
DIVIDEND POLICY AND CAPITAL STRUCTURE UNDER THE IMPUTATION TAX SYSTEM: SOME CLARIFYING COMMENTS
Author(s) -
Howard Peter F.,
Brown Robert L.
Publication year - 1992
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/j.1467-629x.1992.tb00176.x
Subject(s) - dividend , dividend policy , capital structure , imputation (statistics) , dividend tax , economics , corporate tax , miller , tax policy , monetary economics , double taxation , business , tax reform , finance , tax avoidance , public economics , state income tax , gross income , missing data , debt , ecology , machine learning , computer science , biology
This paper analyses the effects of the imputation and capital gains taxes on the dividend and financing decisions of Australian companies. We develop a framework, consistent with Miller's [1977] approach, in which interactions between dividend and financing decisions can be explored. The significance of these interactions depends on both corporate dividend policy and on the relationship between personal and corporate income tax rates. We conclude that under imputation, dividend decisions are more important relative to capital structure decisions, than under the classical tax system.